00 — OverviewExecutive Summary: A System That Grew Fast, Mostly by Lending More to the Private Sector
Four forces shaped 26 years of change. Credit to the private sector outgrew deposits, so its share of broad money (M3) rose from 24% to 77%. Government moved from the banks' main borrower to a net depositor in most years of 2003–2008, and back to a large net borrower from 2010. Net foreign assets grew about 15-fold since 2000 but fell from 60% to 18% of M3. Cash and dollars lost ground to bank deposits in shillings.
Credit to the Private Sector and M3, 2000–2026
Private Credit and FX Deposits as % of M3
| TZS billion unless stated | 2000 | 2005 | 2010 | 2015 | 2020 | 2025 | Sep 2026 |
|---|---|---|---|---|---|---|---|
| Credit to private sector | 341 | 1,654 | 5,992 | 15,493 | 20,308 | 44,603 | 56,359 |
| Extended broad money (M3) | 1,398 | 4,251 | 11,013 | 22,115 | 29,921 | 60,989 | 72,828 |
| Private credit / M3 (%) | 24.4 | 38.9 | 54.4 | 70.1 | 67.9 | 73.1 | 77.4 |
| Government (net) | 347 | 185 | 807 | 4,882 | 5,831 | 12,627 | 13,120 |
| Net foreign assets | 843 | 2,665 | 6,126 | 8,244 | 10,722 | 15,286 | 13,152 |
| NFA / M3 (%) | 60.3 | 62.7 | 55.6 | 37.3 | 35.8 | 25.1 | 18.1 |
| FX deposits / M3 (%) | 21.8 | 30.4 | 27.0 | 28.6 | 23.0 | 21.7 | 21.3 |
| Currency / M2 (%) | 35.9 | 30.1 | 23.6 | 23.3 | 19.5 | 17.8 | 16.4 |
| M2 / reserve money | 1.97 | 2.30 | 2.30 | 2.31 | 3.21 | 3.29 | 3.35 |
Table 1. Key aggregates at year-end. Source: Bank of Tanzania; ratios are TICGL calculations.
Six periods of change
- 2000–2003: take-off. Credit tripled; Government turned net depositor in 2003; FX deposits rose to a third of M3 (a reclassification affects Dec 2001).
- 2004–2008: credit boom. Credit growth of 26–45% a year; Government stayed a net depositor except in 2005.
- 2009–2015: government returns. Net government claims rose from TZS 0.1 tn to 4.9 tn while credit still grew 10–27% a year.
- 2016–2021: stall. Credit growth fell to 1.7% in 2017 and 3.1% in 2020; government claims stayed above TZS 3 tn.
- 2022–2025: recovery. Credit growth of 13–24% a year; credit/GDP rose from 15.3% to 19.1%.
- 2026: acceleration. Credit grew 34.2% in September; the Bank raised its policy rate to 6.25% in July.
01 — Credit, Deposits & CurrencyMore Money in Banks, Less in Wallets
What the Money Stock Is Made Of
Currency as % of M2, and the Money Multiplier
- Cash fell from 36% to 16% of M2 between 2000 and September 2026, and the M2 multiplier rose from 1.97 to 3.35, a sign of deeper deposit-taking.
- Dollarisation peaked then eased. FX deposits reached about 33% of M3 in 2003 and 2006, and are 21.3% in September 2026, though the level is large (USD 6.1 bn in August 2026).
- Deposits have not kept pace with lending. Credit grew 34.2% against M3 25.9% in the year to September 2026, so the loan-to-money ratio keeps rising.
The monthly series has a definitional step in December 2001 (quasi-money jumps from about 64% to 89% of M2), so year-on-year changes for 2001 and composition shifts around it mix real change with reclassification.
02 — Government & ExternalWho Competes With the Private Sector for Bank Funds, and What Protects the System
Banking System's Net Claims on Government
Net Foreign Assets and Their Share of M3
Government Domestic Debt Stock
Who Holds Government Domestic Debt, Aug 2026
- Crowding out was largely absent in 2003–2008 and is back. Net claims on Government went from −TZS 0.1 tn (2003) to 13.1 tn (Sep 2026), 18.9% of domestic credit.
- Banks are major holders of government paper. Commercial banks hold 28.4% of domestic debt and their securities holdings were up 40.3% in the year to August 2026, faster than private credit (33.0%).
- The external buffer is thinner relative to money. Net foreign assets of banks turned negative (−TZS 0.99 tn) in September 2026; at end-August the Bank of Tanzania held gross reserves of USD 5.9 bn, 4.2 months of imports.
03 — Who Benefited?Sector, Borrower and Cost of Credit, August 2025–August 2026
Credit grew 33% in the year to August 2026. Its distribution shows where the expansion is going; interest rates show what it costs. Only a year of sector data is in the sources, so these are a snapshot of the latest boom, not a 26-year record.
Share of Bank Credit by Activity
Annual Credit Growth by Activity
What Credit and Deposits Cost, Aug 2026
What the numbers say about access
- Personal loans lead, and most support MSMEs. At 34.1% of credit they are the largest component, but their share fell from 36.0% in August 2025 and growth (24.9%) is below the 33% average.
- The boom is in transport, communication and mining (+77% and +76%), then trade (+47%), construction (+42%) and agriculture (+38%).
- Manufacturing is small and volatile: 7.4% of credit; growth recovered to 12.9% after −8.2% in December 2025.
- Price of access: the overall lending rate is 15.05% against 11.93% for negotiated (prime) loans, a 3.1-point gap, and a 12-month deposit rate of 9.36%. Short-term lending still costs 15.3%.
The sources have no breakdown by firm size beyond personal loans, no regional or gender split, and no financial-inclusion survey data. They show where bank credit went, not who is still without it. Answering "who benefited" fully needs sector and firm-size credit series, and FinScope or Global Findex access data.
04 — The Growth LinkCredit Grew Faster Than the Economy, but the Two Have Not Moved Together
Credit Growth vs Real GDP Growth, and Credit Depth, 2018–2025
| Percent | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Real GDP growth | 7.0 | 7.0 | 3.6 | 4.9 | 4.6 | 5.2 | 5.6 | 5.9 |
| Credit to private sector growth | 4.9 | 11.1 | 3.1 | 10.0 | 22.5 | 17.3 | 12.4 | 23.6 |
| M3 growth | 4.5 | 9.6 | 5.7 | 15.5 | 11.6 | 14.1 | 11.1 | 24.7 |
| Private credit / GDP | 13.8 | 14.2 | 13.6 | 13.8 | 15.3 | 16.6 | 17.0 | 19.1 |
| Credit / total credit | 79.8 | 83.5 | 77.7 | 74.4 | 72.9 | 73.9 | 75.9 | 77.9 |
| 12-month deposit rate | 8.8 | 8.8 | 8.3 | 8.3 | 8.5 | 8.7 | 9.2 | 9.6 |
| Long-term lending rate (3–5 yrs) | 17.4 | 16.6 | 16.2 | 16.0 | 15.7 | 15.6 | 15.3 | 14.4 |
| Inflation | 3.5 | 3.4 | 3.3 | 3.7 | 4.3 | 3.8 | 3.1 | 3.3 |
Table 2. Selected indicators. Source: BoT Monthly Economic Review, September 2026, Table A1 (2024 revised, 2025 provisional).
- Depth rose: credit/GDP went from 13.8% to 19.1%, and credit growth ran at two to five times real GDP growth in 2022–2025.
- No visible link in this window. Across these eight years the correlation between credit growth and real GDP growth is about zero (and about zero for M3). With eight points, shocks such as 2020 and nominal credit growth, this neither supports nor refutes a causal link.
- Real growth stayed near 5–6% while GDP per head in USD was flat (USD 1,083 in 2018, 1,087 in 2025), so more credit has not yet shown up as faster income growth in these data.
GDP and prices for 2000–2017, real (deflated) credit, sector value added to match the sector credit data, and controls for investment, trade and the fiscal position, then lagged and error-correction models. TICGL/TERI can run these once the series are assembled.
Extend this analysis
Send sector and firm-size credit series and access surveys, and TICGL/TERI will add the "who benefited" evidence across the full period.
✉️ economist@ticgl.comTanzania Business Intelligence Dashboard →05 - Quick AnswersFrequently Asked Questions
How much has credit to the private sector grown in Tanzania since 2000?
In Bank of Tanzania data, credit to the private sector rose from about TZS 301 billion in January 2000 to TZS 56.4 trillion in September 2026, roughly 187 times in nominal terms or about 21.6 percent a year, and from 24% to 77% of extended broad money.
Which sectors are getting the credit in 2026?
Personal loans, mostly supporting micro, small and medium enterprises, remain the largest part of bank credit at 34.1 percent in August 2026, followed by trade and agriculture. Growth is fastest in transport and communication (77 percent) and mining (76 percent), while manufacturing is only 7.4 percent of credit.
Is a bigger financial system the same as more access to capital?
No. Credit to the private sector is 19.1 percent of GDP in 2025, up from 13.8 percent in 2018, and the overall lending rate is still about 15 percent against a 12-month deposit rate near 9 percent. Data on firm size and access to financial services are needed to say who is reached.
Does the data show that finance has driven growth?
Not on its own. Between 2018 and 2025 annual credit growth and real GDP growth show no visible co-movement in the eight observations available, and GDP is not available before 2018 in the sources used. A causal test needs a longer GDP series and controls.
Muhtasari kwa Kiswahili
Miaka 26 ya mfumo wa fedha Tanzania: nani amefaidika? Kwa data ya Benki Kuu (Januari 2000 hadi Septemba 2026) na Mapitio ya Kiuchumi ya Septemba 2026, mikopo kwa sekta binafsi ilipanda kutoka TZS bilioni 301 hadi trilioni 56.4 (mara 187; wastani wa asilimia 21.6 kwa mwaka). Sehemu yake kwenye M3 ilipanda kutoka asilimia 24 hadi 77, na mwezi Septemba 2026 mikopo ilikua asilimia 34.2 (M3 asilimia 25.9).
Serikali na akiba ya nje: Serikali ilikuwa mweka-akiba wa jumla katika miaka mingi ya 2003–2008, lakini madai yake halisi yamepanda hadi TZS trilioni 13.1 (2026), huku benki zikishikilia asilimia 28.4 ya deni la ndani. Mali halisi za kigeni zilikua mara 15 lakini zimeshuka kutoka asilimia 60 hadi 18 ya M3. Fedha taslimu ilishuka kutoka asilimia 36 hadi 16 ya M2.
Nani amefaidika? Mikopo binafsi (zaidi ya biashara ndogo na za kati) ni asilimia 34.1, ikifuatiwa na biashara na kilimo; ukuaji mkubwa upo kwenye usafirishaji na mawasiliano (asilimia 77) na madini (asilimia 76). Viwanda ni asilimia 7.4 tu. Riba ya mikopo ni takriban asilimia 15 dhidi ya asilimia 9.4 ya amana za miezi 12.
Uhusiano na ukuaji: mikopo kwa GDP ilipanda kutoka asilimia 13.8 (2018) hadi 19.1 (2025), lakini ukuaji wa mikopo na wa GDP halisi haujaonyesha mwelekeo mmoja katika miaka hiyo minane. Tunahitaji GDP ya 2000–2017, mikopo kwa sekta na ukubwa wa biashara, na tafiti za upatikanaji wa huduma (FinScope) ili kujibu kikamilifu. Wasiliana: economist@ticgl.com.
07 - SourcesMethod and Sources
Data, calculations and limits
- Bank of Tanzania, Depository Corporations Survey, monthly, January 2000–September 2026, millions of TZS (file supplied by TICGL). Year-end values are December; 2026 is September. "Credit to the private sector" is the line "Claims on non-central government sector", which matches the Review's definition (checked against Table A1, 2018–2025).
- Bank of Tanzania, Monthly Economic Review, September 2026: Tables 2.2.1, 2.2.2, 2.3.1, 2.6.1–2.6.6, A1, A3, A4; Charts 2.2.6, 2.6.1. Sector shares and growth cover Aug 2025–Aug 2026 only.
- TICGL calculations: multiples, CAGR (Jan 2000–Sep 2026), ratios to M3, M2 and domestic credit, correlations (2018–2025, n = 8). All values nominal.